§ 4.2 p.m.
My Lords, if I may intervene in the debate, I should like to repeat a Statement being made in another place by my right honourable friend the Minister of Agriculture. The Statement is as follows:
"The Council of Agriculture Ministers at their meeting on November 19/20 held a first exchange of views on the Commission's proposals for the improvement of the Common Agricultural Policy. There were naturally differences of emphasis and approach between Ministers, but substantial support for the general aims of the review —to contain expenditure and consumer prices; to improve the balance of supply and demand and reduce surpluses; and to simplify the support system and improve financial control. The Commission's proposals will now be the subject of detailed study in the Special Agricultural Committee followed by fuller consideration in the Council of Ministers.
"The Council also agreed on the framework of a Directive on aids for farming in mountain, and other less favoured areas. The main lines of this Directive follow broadly the forms of support covered by our own arrangements for help in the hill farming areas. As the House knows, these mainly take the form of subsidies for beef cattle and sheep production in the hills and there are also special rates of capital grant for hill land improvement. These will 1212 be covered under the criteria of the new draft Directive.
"The Directive also provides that dairy cattle in the true mountain areas, such as those in steep alpine land, shall receive aid on the same terms as beef cattle. In the lower hill and less favoured regions payments for dairy cows will be restricted to 10 cows in each herd and at a rate of not more than 80 per cent. of that given for beef cattle. All these aids will be applicable at the discretion of each Member State. The specific areas in which it is proposed to apply them will be designated by the Member State and will be subject to approval by the European Commission and the Council of Ministers.
"These payments will be subject to a contribution from Community funds, the actual rate of which will be determined only after a clear indication of the total cost can be established once the areas have been defined. The intention, however, is that these contributions should not be less than 25 per cent. and not more than 50 per cent. for the hill livestock subsidies and should be 25 per cent of the cost of aid for improvements under development plans. The remaining cost will be borne by each individual Member State. Final confirmation of the Directive will only take place once the areas have been defined.
The general effect of these decisions is that they confirm the ability of the United Kingdom Government to continue paying grants and subsidies on the broad lines at present in force for hill areas and when the Directive has come into force the cost of these will be reimbursed in part from FEOGA funds. This is an important reassurance to our hill farmers and a confirmation of the undertaking which the Government have always given that we would seek freedom to continue within the Community to give a comparable degree of support to our hill farmers to that which has previously been provided.
The Council Meeting — which was a lengthy one—also discussed a range of other matters ranging from olive oil to alcohol."
§ 4.6 p.m.
§ LORD SHEPHERD
My Lords, the House will be grateful to the noble Earl 1213 for repeating the Statement which, on the face of it, appears to be satisfactory. Since, clearly, the amount that will be due to farmers will be available only when the Directive has been confirmed—and presumably there can be no confirmation until all the nine countries have dealt with their areas designated and have the approval by the Commission—can the noble Earl give any indication of when we may expect the amount to be made available to Parliament for distribution to the farmers? I think that is the main crux of the Statement—how much, and when?
§ LORD GLADWYN
My Lords, may I also congratulate the Government on the successful efforts made on behalf of our hill farmers? May I say that in our opinion what has happened has dispelled a great many of the fears expressed by the opponents to our entry into the European Economic Community during the long debate we had last year.
My Lords, I am grateful to the noble Lords, Lord Shepherd and the Lord Gladwyn, for the welcome they have given to the Statement I have made. I can tell the noble Lord, Lord Shepherd, that all this is bound to take some time because, of course, the individual countries have to put forward their submissions to the Community as to where the line should be drawn for the less favoured areas, and then the Community will have the right to agree or otherwise to their suggestion. With regard to the cost, at present our hill cow, hill sheep and beef cattle subsidies are running at the rate of £30 million a year which we have always paid as subsidy. Once this comes into operation, the grant from the Community from FEOGA funds will vary from 25 per cent. to 50 per cent. of the sum which at the moment we pay to hill farmers.
§ BARONESS GAITSKELL
My Lords, we have a very frank Minister in Mr. Godber at the European Economic Community. He never puts a gloss on the results of his negotiations. When I heard him, I was not very clear as to how well 1214 we have come out of these particular negotiations on agriculture in the high hill areas. Have we really come out very well?
My Lords, I would endeavour to reassure the noble Baroness, Lady Gaitskell, that we have in fact come out extremely well, because there was always an element of doubt that the subsidies we pay to hill farmers might be a contravention of the Community Regulations. Because this has now been agreed, we are able to continue the support to hill farmers which previously we had been able to give them.
§ LORD DAVIES OF LEEK
My Lords, while thanking the noble Earl for the Statement and out of fairness congratulating the Minister on the almighty effort made in a difficult matter, without putting a gloss on it may I ask a simple question? What is a "hill farming area" under the Community Regulations? My information is that they will subsidise up to 2,000 feet. Does that apply in Britain so far as concerns the Welsh and the Scottish hills? Secondly, the dairy subsidy will apply only to ten cows. That will be at 80 per cent. of the rate for beef cattle. Before we can have that in Britain it will have to be confirmed by the Community. How long will these transitional decisions take before a hill farmer (in the market place when he is buying cattle, or when he is rearing cattle) will know when he is going to get the subsidy? Lastly—and this is of paramount importance to the good old British brewing industry—what is the Community policy with regard to hops? Are we going to have to brew beer which suits European man rather than continuing with British brewing, which is the finest in the world?
My Lords, perhaps I may deal first with the last point in the question of the noble Lord, Lord Davies of Leek. The future brewing of beer, whether for English or European consumption, does not arise out of the Statement, and therefore I think it would be inapproprate to comment on that at this juncture.
§ LORD DAVIES OF LEEK
My Lords, I raised the question because I thought it was relevant in so far as one talked of olive oil and alcohol, and I thought brewing was alcoholic.
My Lords, the noble Lord is perfectly correct. These were the kind of things which were also discussed at the meeting, but the conclusions which were arrived at at the meeting were the ones which the Statement adumbrated.
With regard to the noble Lord's first point, about mountainous areas, I think I am correct in saying that they are above a line of 600 metres, some 1,800 feet, which in fact would not apply in this country because animals are not kept at that height here. Even if they were—and this is the answer to the noble Lord's second point—the matter would be subject to this country bringing in its own regulations to determine that these people should have the benefits which the Community say they may have.
§ BARONESS ELLIOT OF HARWOOD
My Lords, coming from Scotland, where we have been very anxious about these particular negotiations, I should like to congratulate the Minister on the result of these talks. This result will bring great comfort to hill farmers, of which I am one. So long as there is no break during the changeover from the subsidies coming from the Ministry of Agriculture and those that will come from the E.E.C. we shall be happy, but we shall be very distressed if we are told that we are to get £x but that it will be six months before it is made up from somewhere else. The total figure should remain the same whether it comes from Europe or from our own Ministry of Agriculture. May I say again how grateful I am, on behalf of all those who are hill farmers, for the fact that this matter has now come to such an extremely satisfactory conclusion.
My Lords, I am particularly grateful to my noble friend for that observation, because I know she has been concerned, as have others, as to the position of hill farmers under Community regulations. The fact that my right honourable friend was able to discuss this particular problem with his colleagues in Europe and achieve this solution is something about which we can be pleased. I would only say to her that I think it would be a pity to look too much into the future. The principle is there; we can continue these subsidies.
§ THE EARL OF LAUDERDALE
My Lords, further to the alcohol point, could my noble friend give me some idea what was under discussion, even though no decisions were reached? In other words, what is brewing?
My Lords, I think my noble friend would do better to wait to see what emanates from this rather than what is actually brewing.
§ LORD BALERNO
My Lords, may I ask my noble friend whether any consideration was given to the question of island farming? We have in Britain many islands which are at a similar disadvantage to the high ground farming on the Continent, the mountainous farming on the Continent. The question has been asked before by the industry, whether island farming could be equated with mountain farming.
My Lords, the Statement refers to the mountainous areas. I will ceratiniy look into the point my noble friend has made and, if I may, I will write to him about it.
§ LORD WALSTON
My Lords, I certainly have no objection to what the noble Earl has said and I think he and the Government deserve thanks for it. But would he not agree that this is essentially a social rather than an economic payment, in that it is done to preserve the wellbeing of people rather than to encourage a certain form of production which is needed; and in that case, would it not be more reasonable and less misleading if this payment were made from some social or regional fund of the Community, rather than from FEOGA?
My Lords, I do not think that would be so, because we have always regarded hill farming as desirable, for one reason or another, and I take the noble Lord's point as to which reason he would have. We have always supported this farming under agricultural subsidies. It might well have been that we would have contravened the regulations if these had continued. Now that authority has been agreed within the Community, I think that we should be pleased that we have this ability to continue these subsidies. Of course we will now be subsidised ourselves for continuing these subsidies, from FEOGA 1217 funds. I think that is a point about which many noble Lords who have criticised FEOGA and our payments will be glad.
§ LORD BOOTHBY
My Lords, will the noble Earl bear in mind that beer brewed in Munich is very much better than beer brewed in this country, and perhaps he could arrange for some kind of transference between the two?
My Lords, it would certainly be very indelicate of me to arrange any form of transference on that scale, but no doubt the noble Lord, Lord Boothby, will have his own methods of obtaining what he likes.
§ VISCOUNT MASSEREENE AND FERRARD
My Lords, hill farming and hill farming regulations have nothing at all to do with altitude; they are really to do with marginal land. My noble friend asked about islands. Of course, islands come under hill farming regulations because they are marginal land. Hill farming has got nothing to do with altitude in this country.
My Lords, I dare say that is so, but where, at the moment, farmers are farming land on which they can claim hill farm subsidies they will be able to continue to do so.
LORD BELHAVEN AND STENTON
My Lords, I ask this question for illumination, because I have been hill farming myself over the last two years. As the price of beef and mutton and meat of all sorts has at least doubled, in all humility I ask my noble friend, is it still necessary to have subsidies for this production at all? I think it may be, but I think many people would like to know.
My Lords, I think that is the very kind of point which will be argued during the forthcoming Annual Review of farm prices.